Polycentric governance and the impact of special districts on fiscal common pools
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2018, Igitur, Utrecht Publishing and Archiving Services. All rights reserved. Local government services are increasingly being provided in fragmented polycentric systems where the overlapping jurisdictions draw resources from the same fiscal base. Developing optimal policies for the efficient management of fiscal resources requires a consideration of the total underlying fiscal pool. In this study, we evaluate the impact that special purpose districts have on debt ratios at the county common pool level in the State of Georgia (U.S.) between 2005 and 2014. Empirical findings suggest that inclusion of all general government and special purpose debt for each county may at times result in a greater burden on fiscal common pool than existing rules permit. These results call into question the efficacy of fiscal policies in a polycentric governance system that neglect to account for debt levels for all actors within the confines of a single fiscal common pool unit. Results also show that total debt ratios are significantly affected by special districts that operate within boundaries of a single county. We find no evidence that independent special districts have a differential impact on fiscal common pools compared to their dependent counterparts.
